ZPIC agents’ tac­tics draw provider com­plaints, at­ten­tion from feds

In­ten­sity of scru­tiny by ZPICs draws provider com­plaints, at­ten­tion from feds

Modern Healthcare - - NEWS -

The pop­u­lar con­cep­tion in health­care is that the government’s most ag­gres­sive fraud hunters—known as “zone pro­gram in­tegrity con­trac­tors,” or ZPICs—fo­cus ex­clu­sively on small play­ers like hospices, home-health agen­cies and durable equip­ment sup­pli­ers.

That no­tion is wrong. As the pres­sure to stem ris­ing health­care costs con­tin­ues to build, ZPIC an­a­lysts are go­ing af­ter physi­cian of­fices and even health sys­tems such as North Carolina’s WakeMed Health & Hos­pi­tals, which ad­mit­ted to felo­nious ac­tiv­ity this month fol­low­ing a con­trac­tor’s au­dit (Feb. 11, p. 4).

“I know of hos­pi­tals that have been touched by this,” says Kristin Pol­lock McDon­ald, a part­ner with the law firm Nel­son Mullins Ri­ley & Scar­bor­ough in At­lanta. “It’s go­ing to hit ev­ery in­dus­try.”

The CMS has four com­pa­nies un­der con­tract do­ing this Medi­care pro­gram-in­tegrity work in seven zones around the coun­try, but the com­pa­nies have been prod­ded by re­cent re­ports from HHS’ in­spec­tor gen­eral’s of­fice that sug­gest ZPICs could be gen­er­at­ing more cases from the min­ing of government data.

At the same time, the Se­nate Fi­nance Com­mit­tee and the Government Accountability Of­fice have be­gun an ex­am­i­na­tion of whether the CMS has a tight-enough leash on the pow­er­ful com­pa­nies, as com­plaints about their ag­gres­sive­ness have sur­faced.

Sev­eral sources told Mod­ern Health­care about zeal­ous tac­tics of the ZPIC agents, from show­ing up at health­care clin­ics and tak­ing unau­tho­rized pho­tos, to block­ing rou­tine Medi­care pay­ments for chal­lenges that are never ex­plained and ul­ti­mately shot down at the end of Medi­care’s long ad­min­is­tra­tive ap­peals process.

Na­tion­ally, the four ZPICs em­ploy slightly more than 500 peo­ple, and they use government an­a­lyt­ics and their own pro­pri­etary meth­ods to de­velop cases based on ir­reg­u­lar­i­ties for Medi­care hos­pi­tal­iza­tion and physi­cian care ser­vices—known as Medi­care Parts A and B, re­spec­tively.

Gary Keilty, a man­ag­ing di­rec­tor with Huron Con­sult­ing Group, says he and oth­ers have worked with sev­eral hos­pi­tals that have been tar­geted by ZPICs be­cause of sus­pi­cions in Medi­care bills un­cov­ered by data-min­ing.

“Be­cause of the po­ten­tial al­le­ga­tion of fraud, th­ese tend to be sort of kept quiet,” Keilty says. “Hos­pi­tals are def­i­nitely see­ing ac­tiv­ity as well, but it tends to be more quiet.”

Hospi­tal of­fi­cials are more fa­mil­iar with two other types of CMS-hired en­ti­ties that can au­dit their bills: Medi­care ad­min­is­tra­tive con­trac­tors (MACs) and re­cov­ery au­dit con­trac­tors (RACs). But while those en­ti­ties wield some­what sim­i­lar pow­ers, their au­dit­ing is in­tended only to pre­vent er­rors and re­coup over­pay­ments and penal­ties

ZPICs are charged with find­ing Medi­care fraud. They use tips from the pub­lic and ad­vanced anal­y­sis of government data, and some of their cases end up be­ing turned over to HHS and the Jus­tice De­part­ment for pros­e­cu­tion, as was the case with WakeMed.

That means, un­like re­quests from MACs and RACs, ZPIC in­ter­ven­tions are not rou­tine and should not be treated as just an­other source of work from Medi­care’s al­pha­bet soup of reg­u­la­tors.

“Peo­ple need to take it se­ri­ously,” McDon­ald says. “They do not go away, and more of­ten than not, they do find over­pay­ments.”

Not all over­pay­ments are fraud, of course, and some crit­ics have com­plained that they find lit­tle fraud com­pared with the vol­ume of sim­ple pay­ment er­rors.

But providers of all stripes were re­luc­tant to talk about their ex­pe­ri­ence dur­ing ZPIC au­dits. Numer­ous sources con­tacted for this ar­ti­cle di­rectly and in­di­rectly de­clined to do on-the-record in­ter­views talk­ing about their ex­pe­ri­ence be­ing au­dited by government con­trac­tors.

In the case of WakeMed, the sys­tem de­clined sev­eral in­ter­view re­quests even as the sys­tem made na­tional news this year af­ter it was hit with what pros­e­cu­tors in North Car-

olina called the first-ever case of a not-for­profit com­mu­nity health sys­tem be­ing charged with mak­ing ma­te­rial false state­ments to Medi­care in or­der to in­flate re­im­burse­ments—a crim­i­nal charge that could re­sult in the clo­sure of a 628-bed acute-care hospi­tal in Raleigh if hospi­tal em­ploy­ees vi­o­late terms of a two-year de­ferred pros­e­cu­tion agree­ment.

WakeMed Health & Hos­pi­tals’ Raleigh cam­pus was found to have among the na­tion’s high­est rates of a sus­pi­cious in­pa­tient billing pat­tern, known as “zero-day stays,” be­tween 2003 and 2006. Zero-day stays hap­pen when an in­pa­tient does not spend even one night in the hospi­tal.

Court files re­cently re­vealed that the en­tity that first un­cov­ered the WakeMed con­duct was a ZPIC called Ca­haba Safe­guard Ad­min­is­tra­tors. (At the time, Ca­haba was a ben­e­fit-in­tegrity con­trac­tor un­der the des­ig­na­tion of “pro­gram safe­guard con­trac­tor,” a name that has since been changed to “zone pro­gram in­tegrity con­trac­tor.”)

Ca­haba, which is owned by Blue Cross and Blue Shield of Alabama and based in Birm­ing­ham, de­clined to make of­fi­cials avail­able for an in­ter­view, cit­ing terms of their con­tract with the CMS that for­bids me­dia in­ter­views.

But Lester Per­ling, a part­ner with Broad and Cas­sel in Fort Laud­erdale, Fla., says hos­pi­tals tend not to be sub­jected to the more in­tru­sive in­ves­tiga­tive tech­niques em­ployed by ZPICs, such as phys­i­cal searches of premises.

Per­ling re­counted sto­ries from smaller clients who said ZPIC of­fi­cials ar­rived at providers’ front doors de­mand­ing tours of fa­cil­i­ties, tak­ing pho­to­graphs and re­quest­ing im­me­di­ate ac­cess to doc­u­ments and even desk draw­ers. He rec­om­mends providers in such cir­cum­stances send the in­ves­ti­ga­tors to the wait­ing room and call their at­tor­neys im­me­di­ately.

Rachel Hold-Weiss, a part­ner with the law firm Ar­ent Fox in New York, says providers can’t sim­ply refuse the in­ves­ti­ga­tors en­try, how­ever.

“Who­ever it is who walks in the front door and says we have a piece of pa­per to get this in­for­ma­tion, you want to make sure you have some­one who is trained in how to deal with them,” she says. “You want to make sure that other than water or a cup of cof­fee, noth­ing is of­fered to them. You don’t want to do any- thing that could be mis­con­strued as a bribe,” like of­fer­ing to take a ZPIC agent out to lunch.

How­ever, re­quests for ex­ten­sive doc­u­men­ta­tion by mail are also com­mon, and they must be han­dled with care as well.

Hold-Weiss says government con­trac­tors may gloss over key facts in the med­i­cal records. She has per­son­ally worked on sev­eral cases where the ZPIC wrongly claimed med­i­cal records lacked forms doc­u­ment­ing a pa­tient’s con­sent for treat­ment, even though doc­u­ments to the con­trary were turned over with the orig­i­nal re­sponse.

“ZPICs don’t al­ways find ev­ery­thing in the record that they should,” she says.

The key to mount­ing a solid de­fense in such an au­dit is to make sure that each page of a med­i­cal record submitted for re­view is stamped in an over­all page-num­ber­ing sys­tem, known as Bates num­ber­ing, so that omis­sions or mys­te­ri­ously “lost” doc­u­ments will stand out as gaps in the se­quence of pages.

“In ev­ery case that I have han­dled, there has been at least one record where there was a tech­ni­cal de­nial that there was no ba­sis for, be­cause we have been able to show that the doc­u­ment was there,” Hold-Weiss says.

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